Do you really want to buy a home, but are a little nervous about contacting a lender? If you are unsure if you have too much outstanding debt, the thought of applying for a mortgage, and being told NO, can make anyone feel uneasy.
Well the good news is, that you can do a little research to see if the odds will be in your favor before making the call to a lender. A typical practice by lenders during the qualification process for a conventional loan, is to see if you can pass the ratios above. (Qualifying ratios differ for other types of loans).
So, working these two formulas can give you a pretty good idea of your chances of landing a mortgage and moving into your new home.
Here’s what’s included in Monthly Housing Expense.
Principal & Interest (1/12 of annual mortgage)
Monthly property tax (1/12 of annual tax)
Monthly Homeowners Insurance Premium (1/12 of annual)
Hazard Insurance Flood Insurance
Private Mortgage Insurance Special Assessments
Monthly Homeowner Association Dues
Here’s what’s included in Monthly Recurring Obligations
Installment payments you must pay for more than 6 months
Student Loan Credit Card Payment
Child Support Car Payment
To make this simple I can send you a link to an online mortgage calculator, which will do all the math for you. Just send a request by email to jjbrannon@weichert.com.
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My name is JJ Brannon and I am a Real Estate Agent at Weichert Realtors Triad Associates in Winston-Salem, NC. Can you think of anyone who would find this post helpful? If so please forward this link to them. Thanks for sharing, and "If you need to Buy or Sell a Home, I'll Help You Move On"!
Sources of Information
NC Real Estate Manual 2017
https://budgeting.thenest.com/considered-recurring-debt-21210.html